Key findings from the telecommunications industry

PwC's 21st CEO Survey: The Anxious Optimist in the Corner Office

Optimism continues – but digital disruption remains

Despite the rising threat of digital disruption, telecommunications leaders remain remarkably optimistic about the near future, according to the findings of PwC’s 21st CEO survey. They’re positive about the world economy as well as their own companies. Even as they invest in automation, they expect their workforces to expand. And while threats such as cyberattacks and renewed regulation from populist governments are in the background, CEOs report that these threats are manageable for now.

Telecom leaders maintain optimism

More than half of telecom CEOs, 57%, say they think global economic growth will improve in 2018, and only 5% expect a decline. As it turned out, 2017 was a banner year for global growth, so further improvement would mean quite a good year indeed. And while the telecom CEOs registered more optimism last year than the CEOs overall, this year the other industry leaders have caught up, with 57% expressing optimism about global growth and only 5% expecting a decline, in line with the telecom CEOs’ responses.

Digitisation is prompting a greater reliance on outside help

The reason is apparent: the internet is increasingly disrupting conventional telecommunications markets. A large majority of leaders – 83% – expect disruption from direct and indirect competitors over the next five years. Three-quarters see disruption from changes in core technologies, customer behaviour, and industry regulation. And two-thirds see disruption from changes in distribution channels.

When asked about threats to their business, 45% were ‘extremely concerned’ about the speed of technological change, as were 35% about new market entrants. Cyber threats drew extreme concern from 45%. All of these numbers are higher than the responses for the overall cross-industry sample. Cyberattacks are especially serious for telecoms, as these firms handle not only their own data but data for a great many other companies and customers.

Other threats remain, though less pronounced

Aside from digital disruption, the survey suggests CEOs are not especially worried about dangers to their business. When asked how concerned they were about a variety of economic and social threats, none of the items drew extreme concern from a majority of the CEOs. The most pronounced areas were over-regulation (50% said they were extremely concerned), a rising tax burden (47%), and terrorism (40%). The threat of populist governments drew extreme concern from 37% of these leaders.

The populist movement is also apparent in CEOs’ attitudes about globalisation. They continue to be bullish on the internet: only 17% said the world was moving toward restricting access to the web. But most of them said countries were moving toward regional trading blocs, with nationalism driving a resurgence in multiple rules and regulations.